Federal Budget Deficit and Budget Institutions
In the 1950s and 1960s the United States federal budget generated a surplus that turned into a deficit in the 1970s and became a major policy concern during the 1980s and 1990s. It would take the government until the late 1990s to return the federal deficit to a surplus. Recently, the federal budget is experiencing a growing deficit again and there is widespread concern that it may be difficult to reverse that trend the next few years. To assess the potential for fiscal problems in the coming years, one needs to understand: (a) Why did it take so long for the government to overcome the deficit in the 1980s and 1990s? (b) What mechanisms were used to resolve the problem and whether those mechanisms are available today?
In my research, I address these questions by examining the procedures through which the federal budget is designed and implemented. I use a methodology employed in similar studies in other countries to quantify the institutional characteristics that help or hinder the ability of the government to control the budget deficit. This methodology consists of using a questionnaire to documents factual information about the budget process and to rank its details in terms of the potential that they create for discipline. The results show that the government has the means to keep deficit under control, though more slowly than is optimal.
In my research, I address these questions by examining the procedures through which the federal budget is designed and implemented. I use a methodology employed in similar studies in other countries to quantify the institutional characteristics that help or hinder the ability of the government to control the budget deficit. This methodology consists of using a questionnaire to documents factual information about the budget process and to rank its details in terms of the potential that they create for discipline. The results show that the government has the means to keep deficit under control, though more slowly than is optimal.
School:
Grambling State University
Department:
Economics and Marketing
Research Advisor:
Hadi Esfahani
Department of Research Advisor:
Economics
Year of Publication:
2002